Cannabis will be a legal product in Canada on October 17, 2018, albeit with rigorous regulatory restrictions, including highly restrictive packaging and advertising rules. This comes after significant dialogue between the House of Commons and the Senate, and almost three years after the Government of Canada announced that it would legalize and regulate access to cannabis. An Act respecting cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other Acts (the “Cannabis Act”) received Royal Assent on June 21, 2018.

Once the Cannabis Act comes into force, individuals 18 years or older may legally possess up to 30 grams of cannabis and grow up to four cannabis plants in their private residence – although some provinces have increased this minimum age and are pushing back against the allowance for home-grown plants. Permitted forms of cannabis will include dried, fresh and oils, with edibles likely to be added in a year. Cannabis accessories and services will also be regulated. Until October 17, cannabis will remain a regulated narcotic and those who advertise, possess or sell cannabis will continue to be subject to criminal penalties (with some exceptions for medical use).

On June 27, 2018, Health Canada announced new regulations under the federal Cannabis Act (the “Regulations”). While the Regulations will repeal the Access to Cannabis for Medical Purposes Regulations (the “ACMPR”) which currently govern the medical cannabis regime, the medical access regulatory framework will remain substantively the same under the new Regulations, with adjustments to create consistency with rules for non-medical use, improve patient access and reduce the risk of abuse of the system. Medical users will be able to access product by:

• Purchasing from a federally-licensed seller of cannabis for medical purposes;
• Cultivating their own cannabis, if over the age of 18 (personal production); or
• Designating someone to grow cannabis on their behalf (designated production).

Cannabis products sold for medical purposes will be required to transition from the requirements under the ACMPR to the new packaging and labelling regulations discussed below. Producers of medicinal products will have until April 17, 2019 to comply with the new laws.

Branding, packaging and advertising will be severely restricted under the new regime, incorporating similar restrictions applicable to tobacco, prescription drugs and alcohol products. Much of the underlying legislative policy is intended to protect health, particularly the health of young people. To that end, the Regulations require packages to include THC content, as well as a standardized cannabis symbol with a specified size, appearance and placement. The Regulations stipulate that products must contain one of 14 health warning messages that are to appear with equal frequency over a 12-month period. Similar to tobacco packaging, images or graphics besides the brand name and one brand element (for example, a logo) are prohibited, as are coatings, embossing, cut-outs and peel-aways. Furthermore, packaging must be plain, with a background of uniform colour that cannot be metallic or fluorescent.

Canadian provinces and territories also have jurisdiction to license cannabis and regulate its distribution and sale. As with alcohol, the provinces have put forward different distribution models. All activities will be licensed, but certain provinces have elected to establish government-owned monopolies to sell cannabis, while others will allow private retailers into the market. Recreational consumption restrictions will also vary by province, with many provinces electing to prohibit public consumption. Many provinces have also taken care to prohibit licensed activities taking place in close proximity to schools, hospitals and other premises with similarly vulnerable populations.

Licensed producers and distributors of legal cannabis and accessories will have to carefully monitor compliance to avoid harsh penalties. The maximum penalty for an offence related to promotion, packaging and labelling is $5,000,000 and imprisonment for up to three years. Corporate directors and officers who are found to be party to an offence may be found personally liable and subject to the same penalties.

Miller Thomson is closely monitoring the development and implementation of the Cannabis Act and the Regulations. We invite you to contact us if you have any questions, and would be pleased to provide our assistance in positioning your organization to appropriately address the new cannabis regime.

Originally published on 19 July 2018 on the Miller Thomson website